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V. Basil Hans1 “Thinking is the best way to travel” – Anonymous Introduction
Tourism is not merely an activity for pastime and entertainment. It is an enriching and
energizing activity. For a developing country like India which is on the path of modern economic growth through structural transformation of the economy, tourism is the right vehicle. With diasporic voyages on the rise more and more destinations are being hunted with the vehicle of tourism. The value-added effect of tourism is increasing. Sustainable tourism has vast scope in India by convergence of landscapes with financesacpes, technoscapes, mediascapes and ideoscapes. India’s tourism industry has witnessed upsurge in recent years, paying rich dividends to both consumers and producers. In 2005 India emerged as one among the top 40 tourism earners. Thanks to the vibrant tourism industry, there is now an almost assured channel of financial flow to the country. Apart from substantial contributions to the forex kitty of the country, India’s tourism is also a major source of employment, as a labor-intensive activity in a labor-surplus economy. With its forward and backward linkages with a host of sectors like transport, hospitality, education, health, banking etc, India is all set to reap full potential of this vibrant sector. Therefore, equipping efforts are made by the government under the five-year plans. But the pressure of lingering problems in the Indian economy – mainly transport bottlenecks – coupled with the emerging commitments and challenges under General Agreements on Trade in Services (GATS) is already being felt. The country needs to solve the problems
Paper presented at Contemporary Issues in Tourism Industry: State Level Seminar on World Tourism Day 27th September 2008 at Srinivas College of Hotel Management, Pandeshwar, Mangalore, Karnataka State, INDIA.
Dr. V. Basil Hans is Professor & Head, Dept of Economics, and Dean, Faculty of Arts, St Aloysius Evening College, Mangalore – 575 003, INDIA. He may be contacted at firstname.lastname@example.org
2 and address the challenges surely and squarely not only to strengthen the tourism sector per se but also boost the tertiary sector. The World Travel and Tourism Council (WTTC) – based on Tourism Satellite Accounting Research (TSAR) in 160 countries – has predicted that India has the potential to become the number one tourist destination in the world with the demand growing at not less than 10 per cent per annum. India’s tourist centers have progressed from destinations of devotion to destinations of development. and (iii) to devise alternative strategies for tourism promotion in order to bridge the gulf between potential and performance. 2001. archaeological value. tourism is the only income generating and profitable venture. and diasporic dividends and so on. the objectives of the present paper are (i) to examine the progress and problems of Indian tourism as it has entered the new millennium. In the background of this situation. The country has much to offer by way of spiritual . we have recreational tourism. Conventionally. In certain parts of India. WTTC’s report says that the comparative advantage for India is its mystical attraction with its ancient civilization and culture. They come. In some states tourism has transformed the face of many backward villages into frontline tourist centers. People have been arriving to India too. pleasure. historical tourism. they see and they are conquered by the picturesque beauty of many places in India as also its rich heritage. As reported in The Hindu dated August 17. recreation and health pursuits are part and parcel of human journey in life. ethnic tourism and adventure tourism. in general. such as Kashmir. Himachal Pradesh and Goa. (ii) to analyze the emerging challenges under GATS. Global trotting for knowledge. therefore. cultural tourism. worship. India: Destination of Diversity Basically Tourism involves traveling for a fairly long distance with a specific purpose other than for changing one’s permanent residence.
India possesses all these and more to make it a perennial tourist paradise. Today tourism is the second highest foreign exchange earner for India. and to Rs.68 million in 1991.540 crore in 1998.7 crore in 1951 to 11.18.14. to 2.883 in 2004. Kerala. Orissa. with the government giving organizations in this industry “export house” status. athithi devobhava (Guest is equal to God). Thus. ancient and majestic monuments. desert safari. to Rs. diverse culture. Bourgeoning Business and Economies of Scale India has significant potential for becoming a major global tourist destination. Being located virtually midway between Europe and the Far East.7. rich tropical forests.000 in 1951.75 million in 2001 and to 3. Foreign arrivals to India rose from 0. Incoming foreign tourist arrivals have shown a 6 per cent compound annual growth rate over the last 10 years. the places which generate much economic impulse from invisible items (services) are clearly visible. Madhya Pradesh.37 million in 2004. Rajasthan and Tamil Nadu. Uttaranchal. The large increase is attributed to the GATS Agreement.12 million in 1960 to 1. In rupee terms tourism receipts have grown from Rs. Other attractions are the world’s highest mountains. In this regard the top destinations are Delhi. forts and palaces. Karnataka.9 billion. India has a strategic advantage. Europe and South East Asia/Australia.2 million in 1993 and to 234 million in 2001. Obviously the investment and earning capacity in the economy is rising year after year. captivating wild life. The forex earnings from this sector rose from US$1861 in 1991 to US$ 3533 in 2003. vast coastline with excellent beaches. Inbound tourism was only 17. colorful fairs. lagoon backwaters. Tourism is incredible and inclusive in India’s new growth. The number of domestic tourists rose from 63 million in 1990 to 109. four million tourists visited India and spent US$8. viz. Tourism spending within India was US$ 22 billion in 2001. .9 per cent of overseas visitors. folk arts. registering an annual growth of over 10 per cent. It has always attracted people from all over the globe through supreme and sublime hospitality.3 and mental rejuvenation. During 2006. unique hospitality etc.408 crore in 2000. The World Tourism Organization (WTO) has reckoned India as the most favored destination among the countries of South Asia receiving more than 50 per cent of the total foreign tourist traffic in the area. The proportion of repeated visitors to India is 44.
63 per cent in 1994. leather goods.4 per cent while its share in the country’s GDP is 12 per cent (accounting for 0.10 per cent while it GDP share was 22.23 per cent while that of business trade was a meager 8.5 jobs. hotel and other industrial/service activities the country is poised for a further growth of tourism. Taken separately. travel and also on amusements in parks.30 per cent. travel. trade and hospitality. The business impact of tourism has been tremendous on travel. The increased spending by tourists has generated substantial income earnings for both public and private sectors. real estate and business services was 7. When the income form tourism tends to increase at a higher rate than merchandise export. For every Rs. Costs borne by tourists on food.90 per cent. the tourism industry creates 47. It is simple economics that “one man’s spending is another man’s income”. On an average the growth rate of tourism trade during the globalization era was an impressive 24.10 lakh invested. insurance. and again rising to 12. carpets. it augers well for the tourism industry as a whole. According to one estimate nearly 40 per cent of the tourist expenditure on shopping is spent on these items. The growth rate of construction sub sector was 5.81 per cent.20 per cent and its share in GDP 8.40 per cent and its contribution to the GDO 46. transport and communication was 11. A cursory look at the sub sectoral performance of the services sector in the Indian economy will give some useful insights. The employment. jewellery. The income flow has a multiplier effect on the macro economy. ivory and brass work are the main shopping items of foreign tourists.4 We must appreciate the fact that India’s share in global tourist arrivals is only 3. Indian handicrafts particularly. A win-win strategy is at its disposal. the growth rate of tourism trade rose from 9. investment and taxes . With upsurge in automobile. It has given employment to 120 lakh people directly and several lakhs indirectly. accommodation. In 2004-05 the growth rate of the sub sector trade.40 per cent. poverty alleviation and sustainable human development.62 per cent of the world tourist receipts).43 per cent in 1991 before dipping to 9. hotels. During the same period the growth rate of the sub sector financing.83 per cent in 1993.44 per cent in 1989 to a whopping 54. clubs plus taxes have all contributed to the national income stream. Tourism undoubtedly has emerged as an instrument of employment generation.
The sector is reaping the economies of scale too. Gulf and various Asian countries have started exploring medical treatment in hospitals located in various well-to do places in India Progress and Problems Tourism development has always has been an integral part of the country’s five year plans. . It doubled in the Fifth Plan. The National Tourism Policy in 1982 gave a momentum to this sector. Hotel Management and Catering Technology Institutes. Travel Agents Association of India and a large number of hotel management colleges. growth in high spending foreign tourists. A number of new tourism products are entering into the attractive list.3. and coordinated government campaigns to promote ‘Incredible India’.000 in UK. Indian Association of Tour Operators. sports and adventure clubs.00.00.000 in USA. India Tourism Development Corporation. Expenditure rose from about Rs. Medical tourist arrivals are expected to reach one million soon. patients from other countries including Africa. It is currently growing at around 30 per cent per annum. India’s tourism industry is experiencing a strong period of growth. basic infrastructure are all enhancing tourism’s potential and performance.36 crore in the Fourth Plan. Emphasis laid on HRD is clear. A comparison of the medical treatment costs of various countries shows that a procedure like bone marrow transplant costs USD 2.000 in India.187 crore in the Seventh Plan to Rs.36 crore in the Second Plan and Rs.595 crore in the Ninth Plan and further to Rs. Indian Institute Tourism and Travel Management. upto USD 2. Rs.2900 crore in the Tenth five-year Plan. USD 62. beach resorts etc have also contributed to the growth and development of this industry.5. banking. Initially allocations were meager: Rs.5 from manufacturing and transport services. driven by the burgeoning Indian middle class. For instance. Food Craft Institutes.500 in Thailand and just around USD 20. As a result of higher and very expensive medical costs in the western countries. Tourism Finance Corporation.00 crore in the Third Plan. The Tourism Development Corporation. health and medical tourism in India is flourishing. This is mainly because of cost advantage in India.
the tourism industry in India is not without its problems like – . All said and done. The tourism industry has helped growth in other sectors as diverse as horticulture. now the calendar of events is planned. 1998. Besides creating an official website for the Tourism Ministry. The year 1999 was celebrated as ‘Explore India Millennium Year’ with a host of shows. Thanks also to the booming IT and outsourcing industry a growing number of business trips are made by foreigners to India. Dual Citizenship to certain categories of diasporic Indians have given much fillip to tourism in India. exhibitions etc. handicrafts. initiating advertising campaigns such as the “Incredible India” campaign. through visit India programmes. which promoted India’s culture and tourist attractions in a fresh and memorable way. Safaai or cleanliness and Surakshaa or security. India’s governmental bodies have also made a significant impact in tourism by requiring that each and every state of India have a corporation to administer support issues related to tourism. Tourist arrivals are projected to increase by over 22 per cent per year through till 2010. with a 33 per cent increase in foreign exchange earnings recorded in 2004. tax incentives were also introduced. Suvidha or facilitation. Sahyog or cooperation. and Product/Infrastructure Destination Development. who will often add a weekend break or longer holiday to their trip. generally spend more in India than almost any other country worldwide. agriculture. airports. The tourism industry of India is based on certain core nationalistic ideals and standards which are: Swaagat or welcome. Sanrachanaa or infrastructure. construction and even poultry.6 The first major effort to promote the industry was launched with the announcement of 1991 as the ‘Visit India Year’. Foreign tourists. The next decade saw the restructuring of the schemes of Integrated Development of Tourist Circuits. The Tourism Ministry has also played an important role in the development of the industry. The first ever Indian Tourism Day was celebrated on January 25. Pravasi Bharatiya Divas celebration. Additional schemes/incentives were announced for service providers. Upgrading of beaches. Even the new initiatives to encourage the NRIs and PIOs. Enormous tourist resources were commercialized. Soochanaa or information.
India also signed all the WTO agreements under the single undertaking rule and GATS is a part of this whole package.481 hotel rooms as against 8. communication gaps. New Issues and Challenges Post globalization and under GATS many changes and challenges are confronted by the tourism industry in India. poor flight management etc Poor organization – fragmented market. A few are may be mentioned here. equity. with the establishment of the WTO. Under GATS. tourism and travel related services – hotels and restaurants (including catering). treatment no less favourable than that it accords to its own like services and service supplies’. in respect of all measures affecting the supply of services.g. tourism has become “consumption abroad” and travel of tourists.97. and slow growth of revenue visà-vis countries like China. Without adequate domestic regulation and enforcement. 85. “movement of natural persons”.GATS came into existence as a result of the Uruguay Round of negotiations and entered into force on 1 January 1995. and prices.7 Low share in the world – only 0.38 per cent Inadequate capacity – e. poor advertising. The principle of “National Treatment” by GATS suggests that ‘each member shall accord to services and service suppliers of any other member.206 in China Costly travel – soaring fuel surcharges. etc Gap between demand and supply of manpower Lapses in security and safety – incidents of tout and harassment of tourists in some places Uneven progress – slow growth of village tourism. lack of information about tourist profile etc These constraints have led to poor visitor experience. the liberalisation of education services could adversely impact on quality. Singapore etc. tourist guide services etc are covered for open market access and liberal FDI. Liberalization and Tourism: . tourism etc became “tradable services’. 1. More and more services like transport. travel agencies and tour operators' services. standards. and without up gradation . stringent rules for service providers etc Lack of supportive infrastructure – bad roads. improper health and hygiene. banking and insurance. With this.
Now the question is whether India is in a position to export-import labor. The nexus of globalism and tourism is so sensitive that it is a real challenge to development of environmentalism. Now it is seen in the southern states too. cultural and environmental effects liberalization of tourism can have on local communities and sensitive locales. How will India be able to handle the issue of “direct interaction with service providers”?. These relate to the developmental. From going global we have arrived to the need for “thinking globally and acting locally”. . Already the growing focus on China in food chains etc is visible. In Kashmir sadly it looks like terrorism industry vs. 2. global warming. macro and meso levels have to be identified for developing tourism keeping in view the incidents of communalism. climate change. Openness in sky and land – vigorous competition ahead. pollution etc.8 of infrastructure and facilities of premier domestic institutions there could be loss of competitiveness for domestic providers and possible diversion of resources. There has been increasing pressure form powerful blocks like European Community (EC) also. natural disasters.g. Social and Political Concerns: . the world is forced to make a cost analysis of terrorism. how equipped is it to meet the high international standards in services? Shortage of skilled and trained manpower is another obstacle in benefiting from the opportunities thrown open by GATS to tourism. Isn’t it ironical that in this era of globalization – when we are using hi-tech to squeeze space and conquer time – that we have to pause and ponder over communal problems? Post September 11 (2001). terrorism. need for quality assurance – is India able to meet the challenges? This is the ground reality. These are a few aspects of the new paradigm of “geo-politics of tourism” today. Our tourism industry must prepare itself to meet these and other emerging challenges. tourism industry.Globalization – like in most other fields – has raised socio-cultural issues in tourism too. capital and technology to reap the advantages of enhanced market access an upgrade its tourism sector. No doubt. deforestation. cyber tourism). Can hi-tech tourism go hand in hand with heritage tourism? How balanced are virtual tourism and rural tourism? How to make India a safe and healthy place to tour and travel? New parameters at the micro. technological improvements are likely to lead to increased destination alternatives to physical tourism (e.
airports. 4. and enhancing security should be on the top of the agenda. Lack of integration between domestic and international tourism. 3. 2. railway stations. Let me now put forward a few policy suggestions to develop sustainable tourism in India: 1. the Indira Gandhi International Airport which today ranks amongst the worst in the world according to the WTCC Report needs to be converted into a modern state-of-the-art airport. Kerala has done innovative thinking in “monsoon tourism”. 5. with a consumer-centric approach. socioeconomic and geographic variables. There is a need to showcasing rural tourism as a byproduct of Indian tourism. Success of tourism depends to a large extent on better access to infrastructure. Infrastructural Bottlenecks: . cannot go on and on with the mediocre infrastructural facilities. sports and games tourism etc. At the same time eco-tourism for sustainable livelihoods must be encouraged. etc – needs to be upgraded. That is alternative tourism. Stepping up investment and boosting (world class) infrastructural activities. Service quality – in hotels.A sector that is expected to increase forex by rupees 5000-10000 crore by 2010. 4. India should make the most of its topography. lack of coordination between modes of transport and communication is eating up people’s time and money. For example. This is really a rich and attractive avenue that not only helps reduce seasonality of tourism but also ensure optimum use of tourist facilities and services. India’s challenge is illuminating because of its vast rural areas and rural-urban continuum. Yet a holistic approach should be the objective .9 3. Alternatives: A major breakthrough is taking place in international tourism. This includes health tourism. Thirdspace tourism must be explored and extended. unproductively. Policy Prescriptions For everything we need a policy – a sound policy at that. Proper market segmentation should be done on the basis of criteria like demographic. a new option for India too. natural resources and labor to develop not only traditional products but also non traditional products of tourism. village tourism (in the vintage of global village!).
Tourism’s uniqueness should be clearly understood. will not help. Education. Adequate importance should be given to inductive research on historical importance and contemporary relevance. making interconnectivity in world on an unprecedented scale and unimaginable speed. guides must develop a good rapport with tourists. Tour operators. HRD should be given priority. A one size fits all approach to tertiary activities including tourism. India needs a long term plan for this industry with periodic evaluation and revision. Conclusion The story of globalization and tourism are interrelated as both are crossing the national boundaries. We must circulate it faster. Edutainment is in vogue. Our preparedness for new challenges can be tested by growth coupled with qualitative changes. . From touring to learn we should move to learning to tour. research and training are crucial cogs in the wheel of tourism. GATS has indeed opened new vistas of growth for the tourism industry and fresh challenges are in the offing.10 to project an Incredible and Inclusive India. Commercialization should not result in dehumanizing tourism. 6.
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